2025 Mississippi First-Time Homebuyer Programs and Loans

Buying your first home is a major financial undertaking — even in Mississippi, one of the country’s most affordable housing markets.

Fortunately, first-time homebuyers in The Magnolia State can access several homebuyer programs through the Mississippi Home Corporation (MHC). These programs may offer down payment assistance, funds to help cover closing costs, tax credits and classes to help you prepare for buying and owning a home.

This guide outlines several programs and their requirements to help Mississippi residents achieve their homeownership goals.

First-time homebuyer programs in Mississippi

You may qualify as a first-time homebuyer for these programs if you’re purchasing your first-ever home or if it’s been at least three years since you last owned a residence. In some MHC-targeted regions, you can even bypass the first-time homebuyer requirement.

You can find a map of targeted areas of Mississippi on the ArcGIS website.

Here are some of the homebuyer programs available in Mississippi.

• Easy8 deferred second mortgage: Good option for buying a home in a target area
• Trusty10 second mortgage: Good option for moderate-income buyers
• Smart6 deferred second mortgage: Good option for existing homeowners looking to move up to another home
• Mortgage credit certificate (MCC): Good option for buying a single-family home or a manufactured home
• Housing Assistance for Teachers grant: Good option for public school teachers

Easy8 deferred second mortgage

The MHC’s Easy8 program provides eligible homebuyers with an $8,000 deferred second mortgage at a 0% interest rate. Participants can use the funds for a down payment, closing costs or prepaid taxes, interest and insurance. The loan doesn’t require monthly payments, but you must repay the loan in full if you sell the home, refinance, pay off the primary mortgage or convert the property into a rental. Unlike some first-time homebuyer assistance programs, Easy8 has no asset limits, but you must meet credit score and other requirements for your first mortgage set by a participating lender whether you use a conventional, FHA, VA or USDA loan.

Requirements

• First-time homebuyers, people who haven’t owned a home in the past three years or veterans
• Buy a home in a targeted area
• Meet income guidelines for the county in which you purchase a home
• Meet credit guidelines established by participating lender
• Property must be owner-occupied principal residence
• Complete a homebuyer education course

Pros and cons

Trusty10 second mortgage

The MHC’s Trusty10 program offers up to $10,000 in down payment and closing cost assistance through a second mortgage with a low 2% interest rate, repaid over 15 years. This program has no asset limits and doesn’t impose additional credit requirements beyond those set by the lender for your first mortgage. You can use the Trusty10 with an FHA, USDA, VA or conventional loan backed by Freddie Mac or Fannie Mae, making it a flexible option for first-time homebuyers who need extra financial support.

Requirements

• First-time homebuyers, people who haven’t owned a home in the past three years or veterans
• Buy a home in targeted area
• Meet income guidelines for the county in which you purchase a home
• Meet credit guidelines established by participating lender
• Property must be owner-occupied principal residence
• Complete a homebuyer education course

Pros and cons

Smart6 deferred second mortgage

The Smart6 program provides eligible homeowners with a $6,000 deferred second mortgage. The second mortgage has a 0% interest rate and doesn’t require monthly payments. You must pay off the loan when you sell the home, pay off the primary mortgage, refinance or move out. Unlike some assistance programs, Smart6 is open to first-time and repeat homebuyers. It has no asset limits, but your purchase price is limited to $332,000 in a targeted area or $275,000 everywhere else in Mississippi. You can use a Smart6 mortgage with FHA, USDA, VA or conventional loans through a participating lender. The MHC also allows borrowers to combine Smart6 with the MCC program.

Requirements

• Home must serve as primary residence
• Household income cannot exceed $122,000 (unless used with MCC)
• Meet credit guidelines established by participating lender
• New or existing home must be located in Mississippi
• Available for single-family homes, townhomes, condos and some manufactured homes

Pros and cons

Mortgage credit certificate

Mississippi’s mortgage credit certificate program allows eligible homebuyers to claim up to 40% of their annual mortgage interest as a federal tax credit, capped at $2,000 per year. This credit can reduce your tax liability to zero, and if your eligible mortgage interest exceeds the limit, you can carry forward the excess to future tax years.

MCCs are available with FHA, USDA, VA and conventional loans. However, Smart6 is the only MHC program that allows them.

Requirements

• Be a first-time homebuyer or not have owned a home in three years (unless buying a home in a targeted area)
• Meet annual income limits
• Only available for owner-occupied primary residence
• Borrower must pay a non-refundable $300 fee to participate
• Complete a homebuyer education course

Pros and cons

Housing Assistance for Teachers (HAT) grant program

The goal of the Housing Assistance for Teachers program is to attract qualified educators to rural Mississippi areas experiencing critical teacher shortages. HAT provides up to $6,000 in financial assistance to help teachers purchase homes in designated counties. If you’re an eligible public school teacher, you can get funds to help cover your down payment and closing costs. In exchange, you must promise to serve as a teacher in the district for at least three years. Visit the Mississippi Home Corporation’s website for eligible counties and school districts.

Requirements

• Must meet credit eligibility requirements for a 25- or 30-year FHA, VA, RD Guaranteed or conventional mortgage
• Must agree to serve as a teacher in the school district for three years
• Must contribute at least 1% of the sales price from your own funds
• Must have an additional one month in cash reserves

Pros and cons

Mississippi first-time homebuyer qualifications

You may not interact with MHC when you apply for one of its first-time homebuyer programs. Instead, you’ll work with one of MHC’s participating lenders. The lender will be your go-between with MHC regardless of which program you use.

Steps to apply for a first-time homebuyer program

1. Determine your eligibility. Besides being a first-time homebuyer (or being a veteran or buying a home in a targeted area, depending on the program), you’ll also want to assess your income eligibility for each specific program. Income limits vary by county and family size. You can find the current income limits on MHC’s website.
2. Get prequalified. An approved lender will help you get prequalified to determine your eligibility for one of its programs. Getting prequalified also gives you a clearer picture of your budget and loan options.
3. Complete a homebuyer education course. All MHC programs require you to complete a homebuyer education course from an approved provider. These courses help you understand the homebuying process and your financial responsibilities once you have a mortgage. You can find a list of approved education providers on the MHC website.
4. Find a qualifying home. Ensure the home you choose meets the property requirements for your selected program. Some assistance programs have restrictions on home price, location or property type.
5. Finalize your mortgage application. Submit your income verification, credit history and other required documents to your lender. Credit score requirements vary by lender and loan type. According to Experian, the average credit score in Mississippi is 680. If your score is below that average, taking steps to improve your credit score can improve your chances of getting approved and qualifying for a lower interest rate.
6. Close on your home. The final step is signing the necessary documents to finalize your mortgage and transfer ownership. Your lender and real estate agent will guide you through paying closing costs and signing the paperwork to ensure a smooth process.

Understanding Mississippi first-time homebuyer down payment assistance

The Mississippi Home Corporation offers various types of assistance for first-time homebuyers, veterans and people buying homes in targeted areas. These assistance options include deferred second mortgages, forgivable second mortgages and MCCs.

Out of the 15 DPA programs in Mississippi, about 93% had available funding as of Q4 2024, according to Down Payment Resources’s homeownership program index.

Deferred second mortgage

Requires repayment? Yes

You typically don’t need to make monthly payments with a deferred second mortgage. Instead, the entire balance is due in one lump sum upon a certain event. With the MHC, triggering events include paying off your first mortgage, refinancing, selling the home or moving out and renting the home to a tenant.

Forgivable second mortgage

Requires repayment? No

A forgivable second mortgage is similar to a deferred second mortgage, but you don’t have to repay it if you meet certain qualifications like remaining in the home or teaching in an eligible public school for a set period. However, if you move, refinance or pay off your mortgage before meeting the forgiveness criteria, the second mortgage is no longer forgivable.

Grant

Requires repayment? No

A grant is money you don’t have to pay back if you meet program-specific eligibility criteria. For example, MHC’s HAT program offers grants to public school teachers to help them buy homes in select areas of the state.

Mortgage credit certificate

Requires repayment? No

A mortgage credit certificate allows first-time homebuyers to reduce their yearly tax burden. The tax credit is worth anywhere from 20% to 40% of the homebuyer’s annual mortgage interest, turning what would be a tax deduction into a dollar-for-dollar tax credit.

Mississippi’s MCC program is fairly generous at 40%. The maximum tax credit is $2,000 per year, but if 40% of your annual mortgage interest is more than $2,000, you can carry the unused portion of the credit forward to the next tax year.

Keep these things in mind about DPA programs

Down payment assistance isn’t always free. Some assistance programs — like grants and forgivable second mortgages — provide conditional cancellation of your debt. But other programs, like deferred second mortgages, eventually require repayment in full. Keep these lump sum payments in mind if you later want to refinance your mortgage or buy a new home at the same time you’re selling one for which you received MHC down payment assistance.

How much of a down payment do I need to buy a house in Mississippi?

LendingTree’s latest first-time homebuyer study reveals that the average down payment for a first-time homebuyer in Mississippi was $21,813 in 2024. Depending on your home’s price point, the loan type you choose and whether or not you use DPA programs, the amount you need for a down payment may be more or less. Don’t forget to factor in closing costs, and be aware that some lenders require you to have two to six months’ worth of payments in mortgage reserves on top of your down payment.

Can I qualify for down payment assistance in Mississippi?

More DPA programs are available to first-time homebuyers in Mississippi than to repeat buyers. However, many programs waive the first-time homebuyer requirement if you’re buying in one of MHC’s targeted areas — or, in many cases, if you’re a veteran. You’ll want to check each program’s maximum income eligibility and the maximum property value for your county to see if you qualify.

How do I apply for Mississippi first-time homebuyer down payment assistance?

After determining whether or not you qualify for an MHC down payment assistance program, reach out to a participating lender to get prequalified. You’ll also need to take a homebuyer education course, shop for a home and submit your final mortgage application. Your lender will guide you through applying for down payment assistance.

 Here’s what you need to know about the process of applying for a home loan.

Other first-time homebuyer loan programs

Conventional loans

A conventional loan isn’t guaranteed by a federal agency, but it still conforms to Fannie Mae and Freddie Mac standards. Conventional loan interest rates tend to be slightly higher than those of government-guaranteed mortgages.

FHA loans

The Federal Housing Administration (FHA) guarantees FHA loans. These loans offer low down payment and credit score requirements and FHA interest rates, but you must pay both upfront and monthly FHA mortgage insurance premiums.

VA loans

The U.S. Department of Veterans Affairs (VA) backs VA loans. These mortgages don’t require a down payment, and credit score requirements and interest rates are usually more lenient than conventional mortgages. Plus, these loans cap closing costs and don’t require mortgage insurance. However, borrowers must pay a VA funding fee.

USDA loans

USDA loans are for lower- to moderate-income individuals who purchase, renovate or build a home in targeted rural areas. These loans come with no down payment requirements, but you can only qualify for one if you don’t otherwise qualify for conventional financing with private mortgage insurance.

What are the best first-time homebuyer loans?

First-time homebuyers have multiple options when shopping around for a mortgage. Each option below comes with low or no down payment options. Just keep in mind that buying a home without a down payment puts you at risk of having negative equity. In other words, if real estate prices drop after you buy the home, your house could be worth less than you owe on it, making it tough to sell the home or refinance your mortgage.

Here are four options and who they might be best for.

Home price trends in Mississippi’s major areas

Home prices in Mississippi are growing slightly faster than the national average, according to the Federal Housing Finance Agency (FHFA). Statewide, average home prices decreased by 0.15% from 2023 to 2024, compared to 4.51% in the rest of the country.

The capital city of Jackson, Mississippi’s largest metro area, is growing much faster. Home prices in Jackson rose 3.93% from 2023 to 2024. The Gulfport-Biloxi area, Mississippi’s second-largest metro area, has seen home prices rise 3.92% over the same period.

Is there a first-time homebuyer tax credit in Mississippi?

Mississippi has a first-time homebuyer state income tax deduction. You can deduct any money you deposit into a savings account designated for the sole purpose of purchasing your first home on your state income tax return. You can also exclude any interest earned on the account from your taxable income.There used to be a federal tax credit for first-time homebuyers, but that expired in 2010. Instead, you can claim the MCC on your federal taxes and take advantage of other tax breaks for buying a home.

What are the current mortgage rate trends in Mississippi?

Overall, Mississippi fixed mortgage rates are about the same as they were three months ago. The current mortgage rate predictions from LendingTree forecast that interest rates will remain above 6% into 2025.